E-Invoicing under GST - What is E-Invoicing and its applicability?

‘E-Invoicing’ or ‘electronic invoicing’ is a system in which B2B invoices are authenticated electronically by GSTN for further use on the common GST portal. Under the electronic invoicing system, an identification number will be issued against every invoice by the Invoice Registration Portal (IRP) to be managed by the GST Network(GSTN). All invoice information will be transferred from this portal to both the GST portal and e-way bill portal in real-time. As per a recent update, a meeting between a high-level group of ministers will be organized where they will discuss GST E-invoicing for gold jewelers having a turnover below INR 500 crores. The main aim of this discussion will be to rein fake invoicing and revenue loss. E-invoicing enables a company to automate their invoice processing. ... In addition to cost savings, the ability to automate the invoicing process and integrate with other business systems provides business efficiency and revenue generating opportunities. E- invoicing is mandatory from 1st october 2020 to all business, whose aggregate turnover has exceeded the Rs.500 crore limit in any of the previous financial years from 2017-18 to 2019-20. Likewise, it was extended to businesses with a total turnover of more than Rs. 50 crore from 1st April 2021. Non- issuance of e -invoice is an offence under GST and thus attracts penal provisions. Penalty for non - issuance of invoice ; 100%of the tax due or Rs. 10000, whichever is higher.

How will e-Invoicing curb tax evasion?

It will help in curbing tax evasion in the following ways:

  • Tax authorities will have access to transactions as they take place in real-time since the e-invoice will have to be compulsorily generated through the GST portal.
  • There will be less scope for the manipulation of invoices since the invoice gets generated prior to carrying out a transaction.
  • It will reduce the chances of fake GST invoices and the only genuine input tax credit can be claimed as all invoices need to be generated through the GST portal. Since the input credit can be matched with output tax details, it becomes easier for GSTN to track fake tax credit claims.
BENEFITS
  • With e-invoicing, many unnecessary steps are cut out of the invoicing process. Both you and your customer can save time using online e-invoicing software.
  • With paperless invoicing, you do not have to pay for paper or for postal fees. Further, by saving time with e-invoicing instead of using templates and emailing PDFs, you save working time. Concentrate on other value-adding tasks instead. We all know time is money!
  • By minimizing manual input and increasing automation, mistakes and typos are reduced. You don’t have to worry about your invoice getting lost in the mail.
  • According to Basware, receiving an e-invoice instead of a paper invoice saves up to 90% on processing costs. Also, when the delivery time is shorter, your customer will have increased possibilities to take advantage of early payment discounts.
  • The e-invoice can be at the customer pronto. Also, it demands less effort and time effort to pay an electronic invoice. Because of that, the customer will most likely pay faster.
  • Reduce paper consumption
  • From a buyer’s perspective, e-invoices reduce the risk of fraudulent bills. The authenticity of e-invoices is automatically validated.
  • E-invoicing is already becoming the norm, especially in the B2B-world. You might as well start e-invoicing now since eventually, you will have to, as your customers will demand it. In fact, some companies already refuse to get invoices in any other format.

Electronic invoicing is increasingly utilized across the globe every day. Services and standards are constantly developed and improved. Many of the problems are therefore likely to be resolved. Electronic, online invoicing saves time throughout the invoicing process. The e-invoice software will allow you to invoice under the particular project or client, and content like contact information will be filled out automatically. User-friendly tools help you customize the document according to your needs and liking. No need to open up Excel, email, or contact information pages. E-invoicing helps you with data reconciliation and accuracy during manual data entry. It allows interoperability across businesses. You can track the e-invoices in real-time. The e-invoice details will be auto-populated on tax return forms and e-way bills, making the tax return process easy. E-invoicing drives a push towards digital economy. The resultant positive impact on efficiency of GST system will help lessen fraudulent activities along eradicating data entry errors.